Welcome

M.Jakkaraiah
Asst.professor
PBR VITS
KAVALI

What is a product ?
A

product is anything that can

offered to market for attention,
acquisition ,use, consumption that
might satisfy a want or need.

PRODUCTS

Tangible
products

GOODS

Intangible
products

SEVICES

Features of product
tangibility
Associated
attributes
Features of
product

Exchange
value

Intangible
attributes

Customer
satisfaction

Levels of product
Potential product
Unexpected features

Luxury features
Expected features
Basic features

Basic product

Classifying Products

Durable products
Consumer products,
Business products

Durable products
Durable

Non-durable

Services

Consumer Products
Shopping
Products

Convenience
Products

Unsough
t
Products

. . To satisfy information needs & buying motives

Specialty
Products

CONVENIENCE GOODS
Convenience goods consumers use minimal effort
for frequently purchased low cost items

Staples Emergency goods

Impulse purchases

Shopping Products
Shopping

goods - consumers
make a considerable effort to
evaluate

Consumers make product comparison(s),

They seek information before purchase,
they are not impulsive
Moderate substitutions are made
Products last a considerable time
Monetary & social costs may be high

TVs As a Shopping Product

(2007 ---- 1950s)
Attribute-based
Plasma LCD screen

Price-based

obs
er

vati
on

LOW PRICE

WARRANTY
REMOTE CONTROL
PICTURE
SIZE

Homogeneous products select on price Heterogeneous

products select on benefits

Business products
Materials and parts
Raw materials and parts
Manufactured materials and parts

Capitals items
1.installation
2.equiptment

Suppliers and business services

1.maitainance and repair items
2.operating suppliers

Raw materials
Farm products

Natural products

Manufactured materials and parts

Capitals items

1.installation

2.equiptment

Suppliers and business services

1.mainteinance and

repair items

2.operating suppliers

Product Mix & Product Line

Product Item

Product mix

Widt
h
Lengt
h Dept
h
Consistenc
y

Product Mix
The assortment of products that a

company offers to a market

Width how many different product
lines?
Length the number of items in the
product mix
Depth The no. of variants offered in a
product line
Consistency how closely the product
lines are related in usage

Product Line
& Product Mix
Product Line
LAMPS
Table
Ceiling
Track
Desk

 Product Mix
Product
Line 1
LAMPS
Table
Ceiling
Track
Desk

Product
Line 2
TABLES
Kitchen
Dining Room
End
Coffee
Outdoor
Conference
Computer

Product
Line 3
CHAIRS
Dining Room
Living Room
Bedroom
Outdoor
Desk

CONCEPTUALIZATION OF
PRODUCT MIX
WIDTH

Home
Depot,
Lowes

Tata Motors Tata Steel

BUS

of lines = 4
LORRY
of items = 12

BARS

Tata Tea Tata DTH

GEMINI
TEA

PLATES

CARS

A wide product mix facilitates one stop shopping

D
E
P
T
H

PRODUCT MIX EXAMPLE

Depth (# of items)

Width (# of product lines)

HAIR
CARE

SALTY DENTAL
SNACKS CARE

ShampooChips

SOFT
DRINKS

Tooth Brush Cola

Tooth Paste Ginger Ale

Conditio Nuts
ner
Dental Floss
Root Beer
Crackers
Hair
Spray

Factors influencing change in product

mix
Changes in market demand
Cost of production
Quantity of production
Changes in company desire
Competitors actions and reactions

Product mix stratagies

Expansion of product mix
Contracting or dropping the product mix
Alteration of existing product s
Trading up/trading down stratagies

Product management
Planning
Forecasting
Marketing

of products of a company is
product management

Objectives of product management

To design product stratagies
To spot market opportunities
To develop strategies for each stage of product

life cycle
To generate new product ideas

New product planning

New product : New to the company even it is
in the world
Types of new products
1.New to the world
2.New to the firm
3.Addition to existing product line
4.Improved and revised
5.Reduction in cost

Importance of new product

To meet consumer needs and wants
To meet competition
To increase profits
To avoid threats from substitutes

New
New Product
Product Development
Development Process
Process
Step 1. Idea Generation
Systematic Search for New Product
Ideas
Internal sources
Customers
Competitors
Distributors
Suppliers

Step 2. Idea Screening

Process to spot good ideas and drop

poor ones
Technically feasibility
Financially viable

3.
3. Choose
Choosethe
theBest
BestOne
One

2.
2. Concept
ConceptTesting
Testing--Test
Testthe
the
Product
ProductConcepts
Conceptswith
withGroups
Groups
of
ofTarget
TargetCustomers
Customers

1.
1. Develop
DevelopProduct
ProductIdeas
Ideasinto
into
Alternative
Alternative
Product
ProductConcepts
Concepts

Step
Step 3.
3. Concept
Concept Development
Development &
& Testing
Testing

Step
Step 4.
4. Marketing
Marketing Strategy
Strategy Development
Development

Part
Part One
One -- Overall:
Overall:

Target
Target Market
Market
Planned
Planned Product
Product Positioning
Positioning
Sales
Sales &
& Profit
Profit Goals
Goals
Market
Market Share
Share
Part
Part Two
Two -- Short-Term:
Short-Term:

Products
Products Planned
Planned Price
Price
Distribution
Distribution
Marketing
Marketing Budget
Budget

Part
Part Three
Three -- Long-Term:
Long-Term:

Sales
Sales &
& Profit
Profit Goals
Goals
Marketing
Marketing Mix
Mix Strategy
Strategy

IfIfYes,
Yes,Move
Moveto
to
Product
ProductDevelopment
Development

IfIfNo,
No,Eliminate
Eliminate
Product
ProductConcept
Concept

Business
BusinessAnalysis
Analysis
Review
Reviewof
ofProduct
ProductSales,
Sales,Costs,
Costs,
and
andProfits
ProfitsProjections
Projectionsto
toSee
Seeifif
They
TheyMeet
MeetCompany
CompanyObjectives
Objectives

Step
Step 5.
5. Business
Business Analysis
Analysis
Step
Step 6.
6. Product
Product Development
Development

Step
Step 7.
7. Test
Test Marketing
Marketing
Standard
Standard
Test
Test Market
Market

Controlled
Controlled
Test
Test Market
Market

Full
Fullmarketing
marketingcampaign
campaign
in
a
small
number
in a small numberof
of
representative
cities.
representative cities.

AAfew
fewstores
storesthat
thathave
have
agreed
to
carry
new
agreed to carry new
products
productsfor
foraafee.
fee.

Simulated
Simulated
Test
Test Market
Market
Test
Testin
inaasimulated
simulated
shopping
environment
shopping environment
to
toaasample
sampleof
of
consumers.
consumers.

Step-8 commercialization

Introducing
Introducing the
the product
product into
into the
the market
market

Product Life Cycle

Sales and
Profits ($)
Sales

Profits
Time
Product
Development
Losses/
Investments ($)

Introduction

Growth

Maturity

Decline

Introduction Stage of the PLC

Sales
Sales

Low
Low sales
sales

Costs
Costs

High
High cost
cost per
per customer
customer

Profits
Profits

Negative
Negative

Marketing
Marketing Objectives
Objectives

Create
Create product
product awareness
awareness
and
and trial
trial

Product
Product

Offer
Offer aa basic
basic product
product

Price
Price

Use
Use cost-plus
cost-plus

Distribution
Distribution
Advertising
Advertising

Build
Build selective
selective distribution
distribution
Build
Build product
product awareness
awareness among
among early
early
adopters
and
dealers
adopters and dealers

Growth
Growth Stage
Stage of
of the
the PLC
PLC
Sales
Sales

Rapidly
Rapidly rising
rising sales
sales

Costs
Costs

Average
Average cost
cost per
per customer
customer

Profits
Profits

Rising
Rising profits
profits

Marketing
Marketing Objectives
Objectives

Maximize
Maximize market
market share
share

Product
Product

Offer
Offer product
product extensions,
extensions, service,
service,
warranty
warranty
Price
Price to
to penetrate
penetrate market
market

Price
Price
Distribution
Distribution
Advertising
Advertising

Build
Build intensive
intensive distribution
distribution
Build
Build awareness
awareness and
and interest
interest in
in the
the
mass
mass market
market

Maturity
Maturity Stage
Stage of
of the
the PLC
PLC
Sales
Sales

Peak
Peak sales
sales

Costs
Costs

Low
Low cost
cost per
per customer
customer

Profits
Profits

High
High profits
profits

Marketing
Marketing Objectives
Objectives

Maximize
Maximize profit
profit while
while defending
defending
market
market share
share

Product
Product

Diversify
Diversify brand
brand and
and models
models

Price
Price

Price
Price to
to match
match or
or best
best competitors
competitors

Distribution
Distribution
Advertising
Advertising

Build
Build more
more intensive
intensive distribution
distribution
Stress
Stress brand
brand differences
differences and
and benefits
benefits

Decline
Decline Stage
Stage of
of the
the PLC
PLC
Sales
Sales

Declining
Declining sales
sales

Costs
Costs

Low
Low cost
cost per
per customer
customer

Profits
Profits

Declining
Declining profits
profits

Marketing
Marketing Objectives
Objectives

Reduce
Reduce expenditure
expenditure and
and milk
milk the
the brand
brand

Product
Product

Phase
Phase out
out weak
weak items
items

Price
Price

Cut
Cut price
price

Distribution
Distribution
Advertising
Advertising

Go
Go selective:
selective: phase
phase out
out unprofitable
unprofitable
outlets
outlets
Reduce
Reduce to
to level
level needed
needed to
to retain
retain
hard-core
hard-core loyal
loyal customers
customers

Introduction Stage-Strategies
PRODUCT
PRODUCT

Offer
Offer aa basic
basic product
product

PRICE
PRICE

Cost
Cost +profit
+profit

SALES
SALES PROMOTION
PROMOTION

Heavy
Heavy expenditure
expenditure to
to create
create trails
trails

Distribution
Distribution

Build
Build selective
selective distribution
distribution

Advertising
Advertising

Build
Build product
product awareness
awareness among
among early
early
adopters
adopters and
and dealers
dealers

Growth
Growth Stage
Stage of
of the
the PLC
PLC
Product
Product
Price
Price

Offer
Offer product
product extensions,
extensions, service,
service,
warranty
warranty
penetrate
penetrate Price
Price

Distribution
Distribution

Build
Build intensive
intensive distribution
distribution

Advertising
Advertising

Build
Build awareness
awareness and
and interest
interest in
in the
the
mass
mass market
market

Sales
Sales promotion
promotion

Consumer
Consumer demo
demo

Maturity
Maturity Stage
Stage of
of the
the PLC
PLC
Product
Product

Diversify
Diversify brand
brand and
and models
models

Price
Price

Price
Price to
to match
match or
or beat
beat competitors
competitors

Distribution
Distribution

Build
Build more
more intensive
intensive distribution
distribution

Advertising
Advertising
Sales
Sales promotion
promotion

Stress
Stress brand
brand differences
differences and
and benefits
benefits
Encourage
Encourage to
to brand
brand switching
switching

Decline
Decline Stage
Stage of
of the
the PLC
PLC
Product
Product

Phase
Phase out
out weak
weak items
items

Price
Price

Cut
Cut price
price

Distribution
Distribution

Go
Go selective:
selective: phase
phase out
out unprofitable
unprofitable
outlets
outlets
Reduce
Reduce to
to level
level needed
needed to
to retain
retain
hard-core
hard-core loyal
loyal customers
customers
Reduce
Reduce to
to minimal
minimal level
level

Advertising
Advertising
Sales
Sales promotion
promotion

Causes of New Product Failures

Overestimation of Market Size
Product Design Problems
Product Incorrectly Positioned, Priced or

Advertised
Costs of Product Development
Competitive Actions
Technical problems
Poor planning
Inadequate promotion
Poor packing
Fault pricing

CONSUMER ADOPTION PROCESS

Adopt
Adopt
Trail
Trail
Evaluation
Evaluation
Interest
Interest
Awareness
Awareness

CONSUMER ADOPTION PROCESS

Potential product
Potential product
Augmented product
Augmented product
Expected Product
Expected Product
Generic product
Generic product
Core Benefit
Core Benefit